Unemployment rises as full-time jobs shed

The unemployment rate has risen from 5.3 to 5.4 per cent, as 5,500 jobs were lost in December.

Bureau of Statistics figures show the fall was centred on full-time positions, with an estimated 13,800 lost, while part-time employment increased by 8,300.

The original jobless rate of 5.2 per cent for November was revised up to 5.3 per cent, meaning last month's rise to 5.4 per cent was a modest 0.1 percentage point increase.

The more stable trend unemployment number, which smoothes out monthly volatility, remained steady at 5.4 per cent.

The proportion of those aged over 15 in work or looking for it - the participation rate - remained steady at 65.1 per cent.

Due to the rise in joblessness and shift away from full-time to part-time work, aggregate monthly hours worked fell by 1.1 million to 1.624 billion hours in December.

However, CommSec economist Savanth Sebastian says there were some positive revisions to the November data, particularly for hours worked.

"While 5,500 jobs were lost in December, the November result was revised up to show 17,100 job gains rather than a 13,900 lift in jobs," he wrote in a note on the figures.

"Indeed hours worked was also substantially revised up in November, now showing 0.8 per cent growth rather than 0.1 per cent."

'Holding pattern'

State by state

NSW: Unemployment up from 5 to 5.1 per cent; participation up to 65.3 per cent.

Victoria: Unemployment up from 5.5 to 5.6 per cent; participation up to 65.2 per cent.

Queensland: Unemployment up from 6.1 to 6.2 per cent; participation down to 66 per cent.

SA: Unemployment up from 5.3 to 5.8 per cent; participation up to 63.1 per cent.

WA: Unemployment up from 4.1 to 4.3 per cent; participation steady at 69.3 per cent.

Tasmania: Unemployment steady at 7 per cent; participation down to 60.3 per cent.

NT: Unemployment down from 3.9 to 3.8 per cent; participation up to 74.7 per cent.

ACT: Unemployment up from 4.1 to 4.2 per cent; participation steady at 72.5 per cent.

All figures seasonally adjusted except for Tasmania, NT and ACT which are trend due to small sample size.

Mr Sebastian says that demonstrates the resilience of the Australian labour market in the face of patchy growth and weakness in particular industries.

"It's clear that the job market isn't shooting the lights out but by no means is unemployment soaring. In a big picture sense the job market is in a holding pattern with a modest degree of softening," he noted.

"But while jobs are being lost in some industries, clearly they are being created in other industries."

Nearly 150,000 jobs were created last year, but that failed to keep pace with a 185,000 person increase aged over 15.

Only a decline in the proportion of people either in work or looking for it helped keep unemployment relatively steady at 5.4 per cent, up just 0.2 percentage points from a year ago.

The unemployment rate in NSW is at 5.1 per cent. That's up just a fraction from 5 per cent. Victoria is flat at 5.6 per cent and Western Australia is starting to unwind from a very strong level. So it's at 4.3 per cent. It's very low but it is up from 4.1 per cent.Queensland is hurting a little bit here. The unemployment rate has risen from 6.1 per cent to 6.2 per cent. The Federal Government is blaming of course the Queensland Liberal Government for the rise in the national jobless rate.

Acting Employment Minister Kate Ellis says the Newman Government has basically presided over thousands of job losses. So if you're looking at the deterioration in the coal sector and public sector job losses, that's what the Federal Government is putting that down to.And of course Tasmania is probably the worst off - unemployment rate of 7.3 per cent.

David Taylor

Taylor told PM the figures give an indication of how the economy is performing overall.

I think it's showing more evidence the pillars holding the economy up are starting to show some cracks. Mining hiring is slowing down. The Western Australian unemployment rate has gone up.Of course there are fewer people actually exiting the labour force. So look, I think economists are right. The unemployment rate probably will edge higher as more people stay in the labour force and try and look for work.

David Taylor

TD Securities strategist Alvin Pontoh says he expects that employment will remain soft, but unemployment will not worsen dramatically.

"Those calling for multiple rate cuts probably expect the unemployment rate to continue to rise towards circa 6 per cent, while in contrast we look for a steady rate at 5.5 per cent through 2013, justifying just one more rate cut by mid-year," he wrote in a note on the data.

"Leading indicators are terrible but we believe that the (lagged) effect of earlier easing of monetary policy should translate to a continuation of the current moderate pace of employment growth rather than a renewed deterioration, just enough to absorb the expected labour force growth."

The Australian dollar eased modestly on the data, dropping just over 0.1 cents to 105.45 US cents by 11:41am (AEDT).